July 22, 2015

Not sure why, but got a couple of notes yesterday on this post I did last year over at FOT. For those of you with kids who are home for the summer, you're seeing them on the couch vegging out. You're nervous that they're going to end up underemployed. This is re-post is for you.

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Wow. That title is harsh. Time to man up/woman up.

As whatever higher being you believe in knows—I’ve got my own challenges as a dad. But there’s a couple of things I see out there in the world. And when I see them, I know your kid may end up as a 40-year old barista. Now, my kid may end up that way as well, and that’s okay for him and for your kids—as long as it’s voluntary.

Being a voluntary 40-year old barista—because you have passion—rocks. But being an involuntary 40-year old barista? That’s a place you don’t want your kids to be. So, gather round the campfire, kids, because I’m highly opinionated and ready to go.

Ready? Here’s five ways you can tell that your kid may end up as a 40-year old barista:

1. You aren’t pumping him up on math and science performance-enhancing experiences. You’re going to allow your child to pick a Liberal Arts major. And, why the chart to the right shows that it’s not as bad as originally thought, you need to get your kid into math and science. You should be influencing Johnny with these types of charts right now. You want to be a writer, Johnny? Cool… get a kick-ass degree and a minor in English or Journalism.

2. You give your kids what they want—all the time. What do they want? A second game console? A new pair of kicks even though they just got a pair 1 month ago? Screw that. They need to know that denial is the spice of life. If you’re giving them everything, they’re never going to be hungry. Start telling them no, or tell them to go out and drum up some business in the neighborhood… unless your neighborhood is tough, at which point they should stay inside. But then, the 1st-world problems in this post really don’t apply to you, right?

3. Your helicoptering ways mean they never learn how to manage up. You helicoptering in on every situation they are involved in, either directly or indirectly. You should be listening to what’s going on, then giving them advice on how to manage up in any situation— then have them report back to you on how it’s going. Rinse, repeat. You doing it for them isn’t preparing them for anything.

4. Your kids are 23 or older, and you’re giving them cash flow that’s the equivalent of a low end call center job while they “get on their feet.” This means they never have to take that low-end call center job and feel how bad it sucks. So, they never get hungry. If you’re giving a 23-year old that much cash flow—and a lot of you are—then you’re basically taking the claws out of the lion. They’ll never really hunt on their own. You’d be surprised how many Boomers and late Gen-Xers are bankrolling their 25-year old kids. It continues for many into the 30s, and even the 40s.

5. You’re not actively selling your kids on their likely reality—that they are going to an in-state, state school unless they qualify for Ivy. Private schools—I feel you. There are a lot of positives. Unfortunately, unless the private school is Ivy, Vandy or Stanford, the ROI doesn’t come close to justifying the cost. If you allow them to think that Wistera College (I made it up, but I bet the co-ed scene is awesome and they have a crew team) at 50K a year is a viable option (they’ll study Liberal Arts, by the way), you’re hosed.

Employment. You’re thinking about it as a parent for your kids. Being a barista isn’t a bad thing. But for all the polish on that job and the jazzy music, it’s the suburban equivalent of going to work at the plant. New world order—I wish there were more plants. It’s the big town equivalent of working at a convenience store, which is what small-town kids do when it all goes wrong.

Small town kids with similar outcomes also used to work as video store clerks.

The new jobs being created are low end. The competition is going to get rougher for the real careers. Let’s put on our helmets and get to work as parents. They’re your kids and my kids, so you know they’re going to be smart and witty. But if we aren’t careful, they’ll be having work conversations that sound a lot like the video below—while they earn $10.00 per hour (email subscribers, click through for video from “Clerks”).

April 09, 2015

The business world is becoming increasingly politically correct. Discrimination we all get – it’s bad. Any employment act or comment that speaks to a Title 7 protected group can and will be used against you in a court of law.

So we start to be trained to say nothing. And the politically correct people around us love to remind us when we show ourselves as biased - even when we're referring to a positive trait of a certain group of people.

“I’d watch saying something like that.”

“Other races do the same thing.”

The more we hear, the less we say. That’s just how we get trained as things evolved around us related to discrimination in the workplace.

But the question I have is this – why is it bad to say that a certain ethnicity seems to own a positive trait, discipline or industry - especially compared to other ethnicities?

Example - At my son’s school, kids of Indian descent (continent of India) absolutely own math. They just own it. Everyone knows it, and I think it’s cool. My son was on a college bowl team at one point in middle school and when a math problem came up, the white kids, the black kids and everything in between would just look at the Indian kid.

“Go get it, Pritesh.”

So is it bad to say that a certain ethnicity seems to owns something positive? Because I’ve got another one for you, half related to nationality and half related to family name:

The Patels own the hotel industry.

Travel for a living and stay at a business class hotel – think Holiday Inn Express and similar properties that franchise out, and you’ll see an endless parade of Patels as owners, operators and managers.

The Patels absolutely own the business class and below hotel industry. So I decided to look it up, hoping the politically correct police don't come after me for being so brash. Here's what I found - More from The Chicago Reader:

"People always ask me, 'Where do you guys come from?'" Jayshree says. "What's with all these Patels?" Anthropologists have been trying to figure that out for decades. So have the Patels.

"Well, I'll tell you," Jayshree says. "My mother and father were both named Patel, and so were my grandparents." She pauses briefly and counts on her fingers, then holds up seven of them. "It goes back seven generations! I guess it does seem funny, but it never struck me as odd. I like to think my daughter will marry a Patel, but I won't force her to do anything she doesn't want to."

Three thousand people named Patel recently descended on Miami for a convention weekend that surely would have perplexed every hotel clerk in the city if not for the fact that many of those clerks and their bosses are also named Patel. So are nearly 30 percent of all hotel owners in America, as well as at least half of all the convenience store owners in England and a growing number of Dunkin' Donuts franchisees.

"It's a common last name," says Bobby Patel, a former hotel manager in Chicago. "It's like Smith."

Except people named Smith don't go out of their way to marry other people named Smith, and the name Patel isn't nearly as common as you'd think.

The simple answer is that they're members of an Indian caste that emigrated here en masse. The complicated question is where do they come from originally, and how did they get all these hotels?

All Patels trace their ancestry to the Kansas-sized Indian state of Gujarat, but their declared homeland is the southern district of Kheda, which is smaller in area than the city of Chicago. Although one of the largest castes in Gujarat, they're far from being the largest caste in India. Still, just try finding a more common Indian last name in American telephone books. Not only are they plentiful here, they're prosperous. "Most Indians are lazy," says Nilam's grandfather, Somabhai Patel, whose Indian grocery store on North Kedzie was one of the first in Chicago back in 1977. "You go to India, and you see people sitting on the ground making little piles of stones when they should be building houses." He's only half joking.

The Patels own the hotel industry. It doesn't mean they're limited to that. They originate from India, and they've got a more focused identity they rally around. I think it’s cool.

More importantly, they're proud of it.

Does it make you insensitive if you talk about an entire people related to what they're historically good at? I hope not, because when you get out in America, that’s the way people talk.

December 08, 2014

Who am I? Who cares? Good questions. It's my site, so I'm going dig in once in a awhile by telling you more about who I am - via a "Stuff I Like" series. Nothing too serious, just exploring the micro-niche that resides at the base of all of our lives. Potshots encouraged in the comments.

One of the things we hear repeatedly as HR pros is that we need to learn the business to really be effective. If you've struggled with that, I've got a show you should watch - "The Profit" with Marcus Lemonis on CNBC on Tuesday nights, right after Shark Tank with Mark Cuban, et al.

What is "The Profit"? I'll use this description from Inc. Magazine to describe it to you:

"The Profit is a bit like business turnaround shows Bar Rescue and Restaurant: Impossible, except that Lemonis isn't a consultant, he's an investor. In that way, The Profit is more like Shark Tank, except that Lemonis isn't fielding pitches from wannabes; he's seizing control of family-owned "sick businesses," as he calls them--a car dealership, a flower shop, a candy store--and fixing them.

Invariably, things get messy. "In most cases, the people who apply to get on the show are really in need of more than just financial help," Lemonis says gently, and when he offers more, as he often does--by calling out a bully boss or defending an overworked and underappreciated employee--that's when viewers might see parallels with Dr. Phil or even the Dog Whisperer. A lot can happen in those 40 unscripted minutes."

The thing that makes The Profit must see TV is two-fold. First, Lemonis is actually writing a check for a minority interest in the busienss, but as part of that investment, expects full control for a period of time, after which he gets to the second part of the equation, evaluating the business from his model of "People, Process and Product."

Then he starts making changes that the owners were too myopic to see or capitalize on.

Another positive feature of the show - he almost always breaks down the numbers and explores a profit opportunity based on a slight strategic shift, then explains it in a way almost all can understand.

That type of education is what most HR pros need - where's the revenue/profit opportunity? The good news is that Lemonis almost always tries to promote or lock in the talent inside the small companies that is doing most of the work.

You'll love the fact he tells the owners they're full of ****. You'll stay for the promotion of long overlooked talent, but you'll learn something about business along the way.

Check out The Profit on Tuesday nights on CNBC. Watch the first 2 minutes of one episode from last season below and taste the dysfunction (email subscribers click through for video):

Hmm. Why does it matter to HR pros? Well, chances are your business has to execute financial transactions, and one way your business can improve margins is to reduce transaction fees related to credit cards, bank fees, etc.

September 10, 2014

Hey!! All you HR pros out there in America... In on the growth phase of your business? Super... Snuggled up to the friendly Finance and Accounting pros in your organization? Great... Here's a little snigglet to make sure you have enough duckets to fund all the hyped pay-for-performance initiatives you are cooking up in the test tube you call a laptop...

The budget model? It matters.

Duhhhhh, you say. You get the budget. Hold on there, Donald Trump, because I'm not talking about the fact you have all the salaries loaded into the budget. I'm talking about the FORMULAS the Finance quants are using underneath the names and the numbers.

The big one you need to be aware of is this - Does your comp budget model have a Turnover Factor, or do the funds vacated by positions that are vacant remain in the comp budget, available for proper use?

It matters a lot. A turnover factor projects the amount of turnover a company/division/department is going to have during the budget year, then automatically reduces payroll by the appropriate amount. The logic used when putting a turnover factor in the budget is that those funds should be unavailable in the budget since there won't actually be PEOPLE in those jobs (for that time period).

Details, details....

The effect of the Turnover Factor? Your compensation budget gets a lot tighter, and you'll have a lot more variances to explain month to month. And that kind of stinks... But it's actually the right way to do it from a business perspective...

Additionally, the Turnover Factor puts a LOT of pressure on the pay-for-performance system. Have a lot of managers who have a hard time telling low-performing employees they're not doing that hot with no raise or a limited increase? A turnover factor means you are dealing with a truly zero-sum game. For every dollar your manager gives to a low performer, he won't be able to give that dollar to the star.

Especially if you have a Turnover Factor - because there's no built in slush fund. Budget 4% for increases? With a Turnover Factor in play, that's exactly what you have - with your active employees. Without the TF in play, you've got some wiggle room from a budget perspective.

So give your Finance pro a pound today and learn more. As your company grows, the Turnover Factor is a way of life, but maybe you can delay it a little bit longer. Remember - you're doing it for the PEOPLE - and who could blame you for that?

December 31, 2013

A lot of you use Groupon and similar discount/coupon services. If you've never dug into the business model behind the service, you might be surprised to learn that business (mostly small businesses, btw) that use Groupon and similar services don't always fare well as a result of the campaigns they use Groupon to execute. A study from Harvard Business Review recently caught my eye on the topic.

"Academic research has consistently found that running a deal using Groupon (or one of its competitors) has two main implications for a business: more customers in the short term but lower favorability ratings. Hence, short-term gains in traffic come at the expense of a lower future traffic and the overall value proposition to the merchant remains unclear."

Translation: Using a Groupon-type service means that business owners can drive traffic, but the customers brought in by campaigns have no loyalty, will trash them on reviews and almost never come back to pay full price on a regular basis.

Think about paying candidates to come interview. Could you do that? Yes. Would it be innovative? Without a doubt.

Would it end well? Probably not. They don't value your company, they value the pay they're receiving.

Groupon customers value the deal, not the product. If they had a long term need for the product, they'll already be loyal customers - of the company in question, or one of its competitors.Implication for the HR world - any thought about paying candidates or employees to do anything that's hard to get them to do otherwise is probably garbage.

September 19, 2013

Got a video you need to see today, so email subscribers, please click through.

You want "A" players in your company, right? We all do, even to the extent we make generalizations about having all "A" players, even though that is impossible for a couple of different reasons. First, few companies can aggregate and sign all "A" players. It's a recruiting and economics issue. Next, even if you had all "A" players, logic would suggest that to stretch them, you'd raise the bar on performance expectations, because you're a puppet-master architect, right?

In the video, Gladwell explains that Harvard is filled with the smartest people in the world, and perversely that makes it a dispiriting place to go to school.

At Harvard, the lower tier students are as smart as the top tier students at an average school. However, the lower tier students get just as discouraged at Harvard as the lower tier students at an average school. The result: They don't get their degrees in math or science. The problem is that even a smart kid struggles to keep up when competing with the uber smart. As a result, the kid feels inadequate and drops the degree. Even if they're one of the smartest people in the country.

The drop out rates at Harvard in Math and Science degree programs are the same as a 3rd tier school. Gladwell takes it a step further and looks at performance of PhD students related to publishing rates. Same vibe.

Gladwell says the condition is related to something called "relative deprivation". I'll let you look that up.

My take - Gladwell's findings are one more reason why you can't have all "A" players. Even if you could do that, a certain number of those "A's" are going to feel like "B's", and flee the scene. Which is coded under "regerettable" turnover, but is nothing you could control.

September 03, 2013

As a long-term Starbucks patron, I've always wondered how bad the kids behind the counter were getting hurt by a cashless society, meaning throwaway change and other types of tips are for the most part a thing of the past, right? A friend and reader of the Capitalist reports on how you using your #**#*# ****ing Visa for everything, including coffee, is costing a barista near you:

"Here’s the scoop on the impact of cashless society on baristas.

Katie works in a very busy store in downtown _____ (highest revenue in _____) with a line out the door for a few hours each morning. (Not many coffee shop options downtown.) She worked for Starbucks for 5 years from 2004 – 2009 in various stores in _____, the last stint was 2 years at the same store she is back with now, downtown. I asked how tips were now that so many people use cards to pay for everything.

At daily close, the shift leader dumps the tip jar into a (container?) and puts it in the safe. Every two weeks, on the Friday that isn’t pay day, tips are distributed in cash in envelopes, meted out based on the number of hours each person worked in the two week period. “It’s the only way that makes sense” said wise ______, as opposed to tracking who worked the highest volume shifts and other ways they tricked it up before.

I asked how tips were going now that everyone is using cards for everything. So when she left in 2009, tips averaged about $2/hour extra. So two 32 hour weeks would net her about $128, a big relief between paychecks right? Now, she says, with everyone paying with theirdamn iPhones it’s maybe $1/hour if that. (Emphasis hers.) So going from about $250 a month to less than half that is significant to our 20somethings who are trying to self-sustain. She added in a fuss about how corporate iseven promoting it with their preferred customer cards with perks for frequent customers, who were formerly the best tippers. She said they have a few regulars downtown who throw in a $5 now and then, maybe to make up for all the quarters they used to toss in as though they were more trouble to keep.

Bottom line: A cashless America sucks for baristas. A hundred busy professionals throwing in 50¢ or more every day adds up to a lot of beer money…"

What's also interesting to me on this is that I'm sure baristas saw the trend and some said, "hell, I'm going to make them do the "sign of shame" and make them sign the credit card receipt", forcing a tip. At some point, Starbucks corporate had to take a stand on that and say all credit cards transactions should be paperless to speed up the total service equation (and save the planet).

And boom. With that edict, a starbucks barista near you lost $1,500 annually.

But I do love a paperless credit card transaction. Maybe I ought to throw some cash in the pot once in awhile.

August 26, 2013

One of the games that HR Leaders of all shapes and sizes (company size, not body size) have to play is medical cost. How can I manage the cost of my medical plan? Whether you're fully insured or self insured, you're still left to tweak the design of your plan to manage cost increases. Don't kid yourself, you'll still be doing this when and if Obamacare becomes official. Unless you decide to stop providing benefits at all and take your Obamacare penalty. Good luck recruiting if that's your approach.

The normal flavors of these medical plan design tweaks are pretty obvious. You're basically looking to cut the quality of the plan to keep your costs under control. Flavors of that include - increase the deductible, raise the co-insurance, alter your prescription meds program, etc.

One heftier option was in the news last week - the spousal carve out, which means that you start denying coverage to spouses that have viable medical plans available where they work. Here's more from the New York Times:

"United Parcel Service has told its white-collar employees that it will stop providing health care coverage to their spouses who can obtain coverage through their own employers, joining an increasing number of companies that are restricting or eliminating spousal health benefits.

In a memo addressed to employees, U.P.S. said, “Limiting plan eligibility is one way to manage ongoing health care costs, now and into the future, so that we can continue to provide affordable coverage for our employees.”

The memo also estimated that about 33,000 spouses were covered under its insurance plan for white-collar employees and that “about 15,000 of these would have health care coverage available through their own employers.”

I did a spousal carve out one time at a mid-sized software company. Things you'll need to think about include:

1. The communication plan so you don't look like a total ###. You're going to look like an ###, but you don't want to look like a total ###.

2. Certification - in order for you to really execute this, you're going to have to make all spouses ineligible, then only add spouses that bring you certification from their company that no viable medical option is available. Open enrollment is really the only time to do this without causing a riot.

3. You'll have to define what a viable medical plan looks like at a spouse's company so you can easily determine whether the spouse is eligible to join your plan. My definition of viable is communication related to quality of the plan (what does it cover) and cost (how much comes out of the spouse's paycheck to get coverage). Needless to say, there are a lot of decisions to be made with this.

Having said all of that, the number of employers who have executed the spousal carve out on their medical plans is fairly low. The Times article goes on to outline the following:

"While the percentage of employers adopting changes in policies like U.P.S.’s new limits remains in the single digits, it is growing. According to a corporate survey by Mercer, a consulting firm, 6 percent of companies with 500 or more employees excluded coverage for spouses in 2012 if their spouses could obtain coverage through their own employer. That is double the percentage in 2008, Mercer found."

Notable - The new U.P.S. policy does not apply to the children of those employees. Nor does it affect the company’s 250,000 unionized workers, who belong to the International Brotherhood of Teamsters. At the end of last year, the company had around 399,000 employees, which means 3-4% of it's employees are impacted by the change.

December 21, 2012

I've got a theory I've written about here before - EVERY MANAGER and INDIVIDUAL CONTRIBUTOR HAS A SHELF LIFE AT A COMPANY.

What's a shelf life? Shelf life means that you come into a new opportunity with lots of fresh ideas, and you're engaged and ready to kick some ass. And you do that. Just as importantly, the people around you - the receptors of all that wisdom - view you as at least somewhat fresh and innovative.

Until you're not. I think every manager has a period of about 2-3 years in the company, then they either need to get a different team in the same company, change companies or do what is hardest - reinvent themselves and the personal value proposition they bring to the company and their teams.

"What's the biggest threat to Facebook? Some things leap to mind: Google, Twitter, the shift to mobile, government regulators. But a top Facebook executive says those aren't the real problem.

Instead, it's reversion to the mean, according to Chamath Palihapitiya, who's now a venture capitalist at the Social + Capital Partnership. Reversion to the mean, or regression to the mean, is a concept from statistics. It basically says that exceptional performance can't last forever."

Here's how that works according to CP:

"When companies work, the biggest thing that happens is you revert to the mean. The mean is every crappy company out there. And we all work at crappy companies. We've all done it. We all look at our boss and think, "This guy's an idiot. How does he have this job? This company is so stupid. I hate my job. Is it time to leave yet?"

We've all been in that position.

And so the real question that I was asking myself at Facebook was, "What happens and how do companies end up in this situation?" And my realization was every company gets there eventually. But that last word is the most important.

And the challenge of a senior executive team is to prevent that regression to the mean. And culture is the only thing that does that."

Regression to the mean for companies and shelf life for managers. It's going to happen eventually. Your job is to prevent the regression from happening as long as possible. When you think about it, preventing good talent from that regression is probably the most important thing a HR pro can do, right?